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IRS Letter 6419

Don’t Forget IRS Letter 6419 This Tax Season

Every year’s tax filing season typically includes a few more wrinkles than the year before. And the 2021 tax year, which we’re dealing with in 2022, is no different. Income tax thresholds are slightly higher to account for inflation. The limit for tax-free contributions to a health flexible spending account has gone up. And you might need to deal with a new form: IRS Letter 6419.

We say “might” because IRS Letter 6419 has to do with the Child Tax Credit (CTC).

The Child Tax Credit has been around since 1997. But a major (albeit temporary) expansion for 2021 has created the need for a new tax document. That document isn’t just necessary for filing your 2021 taxes — you’ll also need it to collect the rest of the credit.

The 2021 Child Tax Credit

The Child Tax Credit, as we mentioned before, has been around for almost a quarter-century. But it received a considerable upgrade for 2021 as part of the American Rescue Plan Act, which was signed into law in March of last year.

In 2020, the CTC gave American families a tax credit of up to $2,000 per child age 16 and younger. In the event the tax credit was greater than the total amount they owed on their taxes for 2020, the family could receive the surplus as a refund at tax time, limited to $1,400 per child.

However, in 2021, American families were granted a one-time boost in the popular credit. Families received up to $3,600 per child younger than 6, and $3,000 per child between ages 6 and 17. Moreover, there’s no cap on how much of a surplus could be refunded back to parents.

One more important twist: Rather than having to wait until the next tax season for a refund, parents were allowed to receive up to half of the credit ahead of time, in the form of monthly advance payments, starting in July 2021. 

What Is IRS Letter 6419, And Why Does It Matter?

Starting in December and through January, the IRS began mailing out “IRS Letter 6419, 2021 advance CTC.”

If you received at least one monthly advance Child Tax Credit payments, you’ll need the information from IRS Letter 6419 to fill out Schedule 8812 (Form 1040), “Credits for Qualifying Children and Other Dependents.” The form you were mailed will have two important pieces of information: 

  1. How much in advance CTC payments you received in 2021
  2. Number of qualifying children counted to determine advance CTC payments

The first piece of information will need to go on Schedule 8812, on either line 14f or 15e. The second piece of information will determine whether the IRS used the right info in determining your Child Tax Credit payments. (For instance, if you had a baby in 2021, you would not have received advance payments but you still would be eligible to claim the child on your 2021 taxes and collect the full credit as a refund.)

Saving this letter — and properly filling out Schedule 8812 — is pivotal to getting an accurate and timely tax refund. Indeed, Schedule 8812, line 14f, actually says, “Caution: If the amount on this line doesn’t match the aggregate amounts reported to you (and your spouse if filing jointly) on your Letter(s) 6419, the processing of your return will be delayed.” 

A Few Important Notes

  • If you’re married filing jointly, you’ll receive two letters, and you’ll need both for when you file.
  • Some Letters 6419 contain incorrect information. If yours does, you can go to the IRS Child Tax Credit Update Portal to determine whether the record there matches the dollar amount of payments you received. If not, you’ll need to ask the IRS to trace the payment; the IRS will need to update your record if it was found to be returned.
  • If you haven’t received a Letter 6419 yet, you will need to check the update portal, or call the IRS at 800.829.1040. Similarly, if you know you received a letter or lost it, visit the update portal.

Need Help With Your Taxes?

McManamon & Co. is a full-service firm that provides a commonsense approach to accounting, tax and business consulting services for small and midsize businesses. If you need help, we can do far more than filing — our tax services include minimizing your liabilities this year and plan to maximizing the tax code in your favor with a comprehensive plan each year after that.

McManamon & Co. is here for your business tax, accounting and consulting needs. Call us at 440.892.8900 or contact us online today.

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